Hey, Detroit: Look Who's No. 1 (for Now)

Toyota Leaps Past GM in Sales for First Three Months

DETROIT (AdAge.com) -- The outcome Detroit has been girding for is finally upon it: Toyota Motor Corp. sold more vehicles than General Motors Corp. globally in the first quarter for the first time.
Toyota reported it sold 2.35 million vehicles in the first quarter; GM sold 2.26 million during the period.
Toyota reported today that it sold 2.35 million units, a 9% jump from the year-ago period and some 90,000 units more than GM, according to Automotive News. Toyota's tally includes small-car brand Daihatsu Motor Co., last sold in the U.S. in 1993, and commercial mid-size truck maker Hino Motors.

GM reported last week it sold 2.26 million new vehicles around the world in the first three months of 2007, a 3% improvement from the comparable period last year.

'Exceptionally quick'
Experts had predicted Toyota would overtake GM in sales by the end of this year or next. Reaching that milestone in first quarter "is exceptionally quick," Lincoln Merrihew, senior VP of TNS Automotive, told Advertising Age. "No doubt about it, Toyota is on a tear."

He said higher global gasoline prices helped Toyota due to consumers' general perception that its models, including hybrid-engine cars, get better fuel economy. Toyota's first-period results bode well for the automaker the rest of the year, he said.

Toyota has made inroads with its move to take its luxury Lexus brand global and has expanded into new vehicle segments in the U.S., Mr. Merrihew noted. But he doesn't expect Toyota's growth to continue at the present torrid pace. "Now, additional growth at this pace will have to come from penetrating new markets like China and Russia."

Mr. Merrihew said that while the Japanese automaker is undoubtedly pleased at its progress, Toyota is worried it is "becoming more of a target" for potential negative perceptions or anxiety that its growth has been too fast.

Scapegoat for Detroit's woes
And it is afraid of being a scapegoat for its Detroit's woes.

In typical Toyota fashion -- its corporate mantra is "constant improvement" -- the automaker has apparently already started preparing for a potential backlash here. The automaker in January created the new corporate post of group VP-strategic research, planning and corporate communications at Toyota Motor North America in New York, and tapped Steve Sturm, 55, a seasoned marketer at Toyota, to fill the post.

"My job is to manage and work on the image of the company, to promote the image and the relationship of our company to society," he told Advertising Age in an earlier interview.